OpenAI is actively negotiating a significant funding round, aiming to raise up to $100 billion, which could potentially elevate the company’s valuation to approximately $830 billion, according to a report by the Wall Street Journal citing unnamed sources. This ambitious fundraising initiative is expected to be completed by the end of the first quarter of the upcoming calendar year, with possible investments from sovereign wealth funds.
The financing effort follows OpenAI’s plans to allocate substantial resources towards developing and advancing AI technology globally. The company’s increasing operational costs related to inferencing suggest a shift towards relying on cash rather than cloud credits, indicating that its computing expenses are surpassing what existing partnerships and credits can cover.
In light of rising competition from firms like Anthropic and Google, OpenAI is under pressure to accelerate the development and release of its AI models while expanding its influence within the developer ecosystem.
Investor sentiment surrounding the AI sector has recently turned cautious, with concerns regarding the sustainability of aggressive investments by major players such as Amazon, Microsoft, Oracle, and OpenAI itself. Additionally, a shortage of memory chips poses a risk to broader tech industry growth.
Speculation is also rife regarding OpenAI’s plans for an Initial Public Offering (IPO) as a means to generate substantial funding for its ongoing projects, which are currently forecasted to yield annual revenues of around $20 billion. Furthermore, there are indications that OpenAI is pursuing a $10 billion investment from Amazon, which would facilitate access to the tech giant’s latest AI computing chips.
If successful, this funding round would significantly enhance OpenAI’s financial stability, adding to its existing capital of over $64 billion, as per PitchBook data. The company’s recent valuation stood at about $500 billion during a secondary transaction. OpenAI has not yet responded to requests for comment regarding this funding initiative.
